LABOUR AND MONOPOLY
By PROFESSOR HERMANN LEVY
THE British working-class population has always been the strongest opponent of monopoly. This is easily explainable. The purchasing-power of working-class incomes depends upon cheap prices more vitally than that of any other group in the community. Cheap prices, however, are usually considered to be safeguarded by the levelling influence of unrestricted competition. It was this con- sideration which always prompted Labour leaders to oppose midi and trusts as a matter of principle. In 1918, when the Committee on Trusts published its report, four of its members, among them Mr. Ernest Bevin and Mr. Sidney Webb, felt it necessary to stress emphatically the action which they held to be essential against industrial combination. "Where free competition no longer governs the business world," they declared in an addendum to the report, "the wage-earner cannot be convinced that any reduction in the expenses which may be effected by labour-saving machinery or other improvements will be reflected in a fall of prices." Since then industrial combination has not only greatly expanded ; it has also extended its sphere of operation through the media of retail trade associations, which are the latest form of quasi-monopolist organisa- tion in Britain. Through them industrial combination is today far more than ever before related not only to raw materials and capital goods, but to consumers' goods as well ; it follows its products right into the shop. This is the case, for instance, with proprietary articles in the pharmaceutical and cosmetic trades, with photographic supplies, with tobacco and cigarettes, with motorcycles and bicycles, with many grocery products, electric lamps, radio sets and other commodities.
The network of industrial combination has thus encroached upon the worker's immediate interests as a consumer. His resistance to industrial combination might have been expected to grow stiffer as . its influence upon his daily budget became more evident. In practice, however, workers have not always been entirely disposed to fight non-competitive industrial orgahisation ; sometimes they have even been disposed to participate in it themselves. Workers may be impressed by the argument that high wages can only be paid when and where profits are good ; and profits, it may be argued, are not good when " cut-throat" competition depresses prices. The argument may be altogether wrong, for in the second half of the nineteenth century increasing profits, greater wealth and higher wages were associated with falling prices. On the Continent, however, even the earliest writers on cartels, such as the socially-minded Lujo Brentano, were eager to point out that cartelisation may be useful in preventing sudden destructive slumps. And in Britain the Whitley Councils, had they been successful, would have presented an attempt to reconcile the workers' ideas about competition and cheap prices with- the aims of cartels. The Committee on Trusts expected that "as the control of industry by. joint councils of employers and work- people on the lines of the Whitley Committee recommendations becomes a reality—i.e., extends to matters of price, output, limita- tion of competition, and the regulation of trade generally—the problem of monopoly will assume yet more formidable proportions."
Instances of employers and workers combining forces to fix prices and regulate trading conditions occur from the earliest days of industrial combination in Britain. Such combinations were called "Alliances," and the Bedstead Makers' Alliance of Birmingham was a prominent example. In marked contrast to his later statement in the Report on Trusts, Sidney Webb wrote of this price cartel that "both parties . . . unite their forces in order to exact better terms from the community for the trade as a whole, and incidentally to protect themselves against what they choose to consider the unfair competition of a few industrials among them." The much discussed Crofter Case of 1942 is another illustration. An association of Harris tweed producers secured the co-operation of a trade union in their competitive struggle with some smaller outsiders who were able to sell tweeds at what the Association regarded as unfair prices. It happened that the outsiders had to use a port for ship- ment of their goods. Ninety per cent, of the workpeople of the associated mills were members of the Transport and General Workers' Union, and the dockers at the port were also members of that union. The union submitted a scheme to the Mill-Owners' Association offering to "provide definite safeguards to-the successful operation of a minimum selling price" and an embargo was imposed on the shipping of the outsiders' products—an instance of a complete monopolist understanding between manufacturers and workers.
The possibilities of such understandings appear to be most pro- mising in the field of retail trade associations, in particular where these associations are composed •both of producers and retailers. The cry that there are "too many shops" has led many of these associations to campaign for the registration and licensing of retail concerns. Recent inquiries by the National Chamber of Trade have revealed the fact that, where retail trade associations exist, six out of every seven members may be expected to be in favour of some form of licensing after the war, though perhaps not as a permanent system. Such aims have for some time received a warm welcome from the National Amalgamated Union of Shop Assistants; as may be seen from Shops and the State, a pamphlet written in his official capacity by Mr. P. C. Hoffmann, an official of that Union, which fully explains the case for registration and licensing, and defends it on the ground that "organisation must take the place of competition." The same may be said about the aim of trade associations to introduce qualification tests into the distributive trades. The latest tendency is to favour the creation of what may be called a" certified retailer." This proposal is, for instance, widely advocated" in the grocery trade. Once this system were fully estab- lished, by means of institutes appealing for the "higher education" of the shopkeeper and his assistants, entrance into a trade would be restricted as it was by the guilds of old. This may prove very satisfactory to those who arc already well established as retailers, but it Would become a bar to many who could not see their way to acquiring the necessary and expensive education demanded of would-be entrants to the business. But trade associations can hold out tempting prospects of much better salaries to the shop assistants who pass the qualification tests. A completely monopolist organisa- tion is sometimes publicly envisaged. A journal in the leather goods trade recently submitted to its readers a plan to promote a cartel: "Having united the trade and set up a control over those coming into it, the next step is to see that the recognised labour rates are paid in the industry." It was pointed out that a National Wages Board was already in being, and that all that remained to do was for every member to abide by the National Wages Agreement ; if this were not found sufficient, a Trade Board should be set up to enforce the wage rate, and to see that no one in the trade were allowed to pay less than the minimum rates. The organisation of the industry was to embrace met per cent. of the manufacturers, and as one of the functions of the association if was suggested that it should give "a lead to the trade in pricing goods." The bargain
between the organised workers and the producers' non-competitive organisation would then be perfect.
In view of such developments, it can no longer be said that labour might be expected to consider its interests in practice as definitely opposed to industrial or distributive combination. When dealing with the problem after the last war, Mr. Ramsay MacDonald wrote that "the fact that Capitalism as a system of production contains inherently within itself a fatal conflict with labour, that it can only end that conflict consistently with itself by making labour a partner in exploiting results of its combinations, that this is practically impossible, but that if it were possible it would only put the public completely at the mercy of combination, that if labour has no other policy than to act aggressively against capital, the community will suffer by inadequate production and high price-- these are facts indisputable and dominant to everyone who has studied the condition of modern industry." These words are still apposite today, but he added that "no scheme of amelioration or accommodation offers a particle of hope." This pessimism may prove to be unjustified if the value of association is sincerely recog- nised by both sides, and if the State, on behalf of consumers, subjects industrial and trade combinations to the control of special administra- tive machinery devised to prevent any abuse of economic power by either of the two combining parties.
Previous page
